Lower Crude, Higher Equities & Dollar, Sending Grains Mixed Signals

A higher start is expected in all pits, around 5 in wheat, 2-3 in corn and 12-15 in beans. Crude oil is lower while equities and the $ are higher, sending mixed signals to the grains.

Malaysian palm oil jumped 115 ringgits today, which is mildly supportive for our bean oil market. China is going to buy an additional 1.25 million tonnes of beans from its farmers by the end of June on top of the 6 million tonnes they already plan on buying. South Korea bought 220,000 tonnes of US corn. The Phillipines and Thailand are in the market for a total of 135,000 tonnes of US wheat for Jun-Jul shipment.

Deliveries were larger than expected with the exception of meal: 8100 wheat to Apr 29; 431 corn to Feb 26; 89 beans to Feb 13; and 4800 oil to Apr 28. There were no meal deliveries, as expected. The only large commercial players were Bunge stopping 159 wheat and ADM stopping 411 oil.

Weekly export sales were slow for wheat, just 142,000 tonnes old crop and 109,000 tonnes new crop. The rest were very good: 1.225 million tonnes of old crop corn and 116,000 tonnes of new crop corn; 835,000 tonnes of old crop beans and 335,000 tonnes of new crop beans; 293,000 tonnes of meal and 31,000 tonnes old crop oil along with 5500 tonnes of new crop oil. Of the bean sales, China took 468,000 tonnes of old crop and 115,000 tonnes of new crop.

Mostly dry conditions are forecast for Argentina's Wheat Belt the next 7-10 days with fall planting approaching. Light rain is predicted in southern Russia and the Ukraine but more will be needed to reverse the recent dry pattern that stressed crops there.

The US Southwest Winter Wheat Belt will benefited from up to 2" of rain in the east yesterday. More is forecast today-Monday, up to 1.5". The 6-10 day also calls for wet weather. The Northern Plains had up to 1.25" the last 24 hours. It will be dry today-Sat with light rain forecast again early next week, which could keep planting slow. The Western Corn Belt had up to 1" the last 24 hours. Light rain is forecast the next 2 days with dry weather forecast this weekend before more rain returns early next week. The eastern half of the belt had rain in Illinois overnight and widespread rain is expected today-Sat, up to 3". More rain is likely early next week. The 6-10 day calls for wet weather also and all this moisture will keep corn and early bean planting slow. --Vic Lespinasse

Outside Markets Suggest A Higher Start For The Grains

A higher start is expected this am, around 5-7 wheat, 2-4 corn and 12-15 beans. The outside markets point higher with the $ index down while crude oil and equities are up.

There is no confirmation of yesterday's rumor that China cancelled US bean imports but Chinese traders say up to 5 cargoes for Jun-Aug shipment were cancelled, which would be up to 300,000 tonnes of beans.

Looking back, remember Monday's weekly export inspections report, which had bean export inspections way below trade ideas at only around 6 million bushels? In that report, there were no bean export inspections to China at all, the first time this has happened in months. This was another indicator of slowing Chinese demand for US beans.

Some traders think the cancellations are linked with Chinese traders reacting to worldwide worries over the swine flu threat, as well as the sharp drop in crushing margins, both of which are probably connected as swine flu could slow demand for pork, which would slow demand for meal, which would hurt crushing margins.

South Korea will be in the market tomorrow for up to 220,000 tonnes of optional origin feed corn.

Argentine wheat areas will stay hot and dry until early next week, when significant rain is possible. Only light rain is forecast in the wheat belt of southern Russia and the Ukraine late this week with dry weather until then.

The US Midwest will see up to 1.5" of rain in the west today-tomorrow with more possible Sun-Mon. The eastern half of the belt had up to 1/2" yesterday with light rain forecast today. Rain is predicted Thur-Fri, up to 2", before dry weather moves in over the weekend. The 6-10 day calls for above normal rain. All this moisture will continue to slow corn and early bean planting. The Southwest Winter Wheat Belt saw rain overnight and more is likely the rest of the week, up to 2" in the east, much less in the west. More rain is likely over the weekend. The 6-10 day calls for above normal rain, all of which will benefit the crop as it continues to develop. The Northern Plains Spring Wheat Belt will see snow/rain today through Thursday, up to 1". Dry weather is forecast this weekend. --Vic Lespinasse

Outside Markets Sending Mixed Signals To The Grains

A mostly better start is likely this am, roughly 5 up in wheat and 10 higher in beans but 2-3 down in corn, similar to overnight trading. Crude oil and the equity markets are lower this am but the $ index is a little lower also, sending mixed signals to the grains.

The Weekly Crop Progress Report yesterday afternoon showed more corn planting than expected, 22% done. This is still less than the average of 28% for this time in the season. Bean planting was 3% complete, as expected, but less than the 5% average. Spring wheat planting was less than trade ideas, 15% in the ground vs. 36% average. Winter wheat showed improvement in its good to excellent ratings, 45% vs. 43% last week, about as expected.

Swine flu worries are still prominent in the market but the knee jerk reaction of yesterday has ended, at least for now. Traders will still watch for any potentially market moving news regarding swine flu. Given higher prices in most pits overnight, however, the market appears to want to concentrate on other factors, especially the weather.

There is still little rain in the picture for the dry Argentine Wheat Belt. As I said yesterday, this isn't a big market influence now but it could become one next month so traders will keep watching the weather there. Dry weather in the wheat areas of the Ukraine and southern Russia is likely to continue the next 7 days, not a major market mover now but still worthy of watching.

The US Northern Plains Spring Wheat Belt will see scattered rain today-Thursday, up to 3/4", followed by dry weather Fri-Sun, which will be welcome. The Southwest Winter Wheat Belt saw up to 1.25" of scattered rain in the east the last 24 hours. More scattered rain is predicted today-Sunday, up to 3" and the 6-10 day calls for above normal rain. All this moisture is still welcome as the crop continues to develop. The Midwest will see scattered rain in the west Wed-Thur, up to 1.5" with dry weather Fri-Sun. Temps will be on the cool side. The eastern half of the belt had up to 1.5" the last 24 hours in Indiana and Illinois. Light rain is forecast today with scattered rain forecast again Thur-Fri, up to 2", before dry weather returns for the weekend. The 6-10 day predicts below normal rain in the northwest part of the belt, above normal rain in the southeast. The eastern Midwest will see further planting delays if all the moisture in the forecast falls as expected. --Vic Lespinasse

World Wide Swine Flu Worries Bearish For Grains

A sharply lower start is expected in all pits this am. This is due to worries about a swine flu pandemic sweeping the world. This is bearish for all commodities not just grains, as it could severely slow down economic activity, depressing demand for commodities. Crude oil and equities are sharply lower while the $ index is higher, a bearish combination for all the grains. The early, tentative call is 12-15 lower wheat and corn, 40-50 down in beans. Planting progress this afternoon is expected roughly 15-20% done in corn, 3% in beans and 20% in spring wheat.

Dalian, China grain futures were sharply lower to limit down today as fear over swine flu grips the market. This is probably an over-reaction to the current situation but one cannot stand in its way. Better to let the market run its course, justified or not, than to worry about whether the market's reaction is overdone or not.

There is no rain in the forecast for Argentina's dry Wheat Belt, with planting time approaching. This isn't a major concern yet but it could become one if the dry pattern continues into next month. China's North China Plain will see mostly dry weather early this week, wet weather later in the week, which will be welcome. Southeast Australia had up to 1.5" of welcome rain for their wheat crop over the last week.

Here in the US, the Northern Plains Spring Wheat Belt had unwelcome week rain of up to .5" with up to 1.5" predicted the first half of this week. The 6-10 day does call for below normal rain, which would be welcome. The Southwest Winter Wheat Belt saw scattered weekend rain of up to 1.5" and more is forecast today-Wednesday, up to 2". Additional rain is likely this weekend, all of which will benefit the crop. The Western Corn Belt had up to 3" of weekend rain with more forecast Wed-Thur, up to 1.5". The Eastern Corn Belt saw up to 2" in the north. More is forecast today-tomorrow, up to 1.5", and again later in the week. The 6-10 day calls for cool temps with above normal rain in the southeast part of the belt, below normal in the northwest. This moisture will keep planting activity slow.--Vic Lespinasse

Outside Markets Bullish For Grains

A steady/mixed start is expected this am. Crude oil and the equity markets are higher while the $ is lower, a bullish combination for all the grains.

South Korea bought 100,000 tonnes of US beans for Jan/May shipment next year. The USDA said 120,000 tonnes of US beans were sold to an unknown destination, widely expected to be China, for the 2009-10 crop year. 116,000 tonnes of US corn was sold to an unknown destination, half for this crop year and half for next crop year. Iraq will be in the market early next month for optional origin wheat.

Stats Canada's planting intentions estimates were 25.2 million acres for all wheat, 5.7 million for durum, 17.3 million for spring wheat, 4 million for oats and 15 million for canola. The canola number was lower than expected and could lend a little support to our bean oil market this am.

California adopted a low carbon fuel standard that will limit emissions of greenhouse gases in motor fuel. Several other states are expected to follow suit. This measure is expected to have a negative psychological impact on the corn market as it could inhibit the use of ethanol as a fuel source. The measure won't go into effect right away and might be challenged in court by the ethanol industry so it is too early to say how much, if any, negative impact it will have on the corn market. I suspect it will have no impact for the next several months, at least, but afterward it’s anyone's guess.

China's Commerce Ministry warned about an oversupply of beans in China due in part to heavy ongoing imports, suggesting the strong import pace might ease over coming weeks or months, which would be bearish for US bean prices. Recently, beans have struggled to trade higher despite generally bullish news, suggesting there is growing overhead resistance in this market following the huge gains since Mar 1, when prices were only around $8.50 a bushel. This is a warning signal for the bulls in beans.

Australia's Weather Bureau predicted above normal rain in the major Western Australia Wheat Region during the critical April-June time frame. It also predicted below normal rain in Southeast Australian Wheat Fields, where drought has been present the last several years. There is little rain forecast in the dry Argentine wheat belt the next several days or longer. This is raising concerns about upcoming planting of the crop.

The US Northern Plains Spring Wheat Belt will see more unwelcome rain today through mid next week, up to 1.5", and the 6-10 day calls for above normal rain in southern and eastern parts of the belt, all of which will seriously further delay spring wheat planting. This has driven Minneapolis wheat sharply higher lately and could do so again today. The Southwest Winter Wheat Belt will see welcome rain the next 5 days or so, up to 2.5". The Midwest will see more planting delays for corn from wet weather over the weekend into early next week; up to 2.5" in the west and up to 1.5" in the east. The 6-10 day calls for wet weather in the west and north, below normal rain in the southeast part of the region. --Vic Lespinasse

Another Higher Start in the Grains Anticipated with Friendly Outside Markets

A mostly higher start is likely this am, once again led by beans. Malaysian palm oil jumped 105 ringgit today to an 8-month high, which might lend a little support to our bean oil market. Crude oil and the equity markets are a little higher while the $ index is a little lower this am, a friendly combination for all the grains.

Weekly Export Sales were good: 232,000 tonnes of wheat for this crop year and 199,000 tonnes for next crop year, starting Jun 1. Corn sales were at 1.214 million tonnes. Bean sales were at 617,000 tonnes this crop year, 824,000 tonnes next crop year, starting Sep 1. Meal sales were at 108,000 tonnes and oil sales were at 58,000 tonnes. Actual oil exports were 34,000 tonnes, a high for the marketing year started October 1.

The Census Bureau Mar crush was a shade higher than expected at 144.7 million bushels. Oil stocks were about 45 million lbs less than expected, 3.064 billion lbs. Meal stocks were 355,500 short tons, around 60,000 short tons below trade ideas. Both these reports should lend support to the market this am.

The USDA announced this am that 116,000 tonnes of US corn was sold to an unknown destination, split between the 2008-09 and 2009-10 crop years. The USDA also said Mexico bought 100,000 tonnes of US beans for the 2009-10 crop year.

North Dakota's Agricultural Commissioner said 1.2 million acres of land intended for spring wheat might not be planted this spring due to heavy flooding. The USDA had previously said about 1 million acres might not be planted. The California Air Resources Board is likely to vote today or tomorrow to adopt a low carbon fuel standard that would limit the amount of greenhouse gases in motor fuels. Under the proposed measure, this proposal considers the carbon impact of ethanol to be too high for the amount of land converted from forest to farmland for corn to make ethanol. Eleven other states are waiting for California to act and they might follow suit. If the measure is passed, it won't take effect immediately but it would have a negative psychological impact on the corn market.

More beneficial rain fell in the winter wheat belt of the North China Plain the last 24 hours. More rain is forecast in China's corn and bean belt the next few days, which will be welcome.

The US Midwest will see scattered rain over most of the belt the next several days, starting tomorrow in the west and Saturday in the east. This rain will persist well into next week, dropping up to 1.5" over much of the region. The 6-10 day also calls for above normal rain, all of which will further slow corn planting and any early bean planting. The southwest winter wheat belt saw welcome rain in Kansas yesterday along with widespread hot temps. Widespread rain is predicted Sat-Tue, bringing up to 2" of welcome rain and the 6-10 day also calls for above normal rain. The northern plains spring wheat belt will see up to 3/4" of unwelcome rain today-Saturday. More rain is forecast early next week and the 6-10 day calls for above normal rain, none of which is welcome as it will further delay planting.---Vic Lespinasse

External Markets Start Off A Negative Outlook For Grains

A higher start is indicated in all pits, roughly 5 cents in wheat, 2 in corn and 3-4 in beans. Crude oil, equities and the $ index have a negative profile this am as far as the grains are concerned with crude oil and equities down while the $ is steady/higher. There isn't a lot of fresh market moving news this am. Traders will keep an eye on the outside markets again today for help in determining the direction of the grain markets.

Stats Canada will put out planting intentions Friday am. Traders think all wheat acreage will be about 24.9 million acres with canola around 16.5 million. China's bean imports for the first 3 months of the year were up 44% from the US and 128% from Brazil but down 34% from Argentina, reflecting the shift by China away from Argentine beans to the US and Brazil.


Dry weather remains a problem in much of Argentina's Wheat Belt as planting time approaches.

The US Midwest will see more welcome warm and dry weather in the west the next several days, speeding up corn planting. Weekend rain is forecast, up to 1", with more possible Monday. The eastern half of the belt had light rain the last 24 hours. Dry weather will benefit the region today through Saturday with rain forecast Sun-Mon, up to 1". Temps should be warm. The 6-10 day calls for above normal rain, which would not be welcome as it will once again slow corn planting. The Southwest Winter Wheat Belt will stay hot and dry until Sat-Mon, when scattered rain of up to 1.5" is predicted. The 6-10 day calls for wet weather in northern and eastern areas, below normal rain in the southwest part of the belt. The Northern Plains Spring Wheat Belt will see unwelcome rain Thur-Fri, up to 3/4" in the south and east, less than 1/4" in the northwest. More rain is possible Saturday. The 6-10 day calls for wet weather in the south and east, below normal rain in the northwest. --Vic Lespinasse

Higher Grains Uninfluenced By Outside Markets This Morning

A slightly higher start is indicated this am after prices gained in overnight trading. The early call is 3-5 higher wheat, 1-2 better corn and 2-4 up in beans. The $ index is steady while crude oil and the equity markets are slightly lower, not enough to influence the grains significantly.

This is in marked contrast to yesterday, when big losses in these outside markets pulled the grains sharply lower. Traders will keep an eye on the outside markets again today in case they move sharply in either direction, in which case they will once again strongly influence the grains.

Corn planting progress was reported 5% complete yesterday afternoon in the crop progress report, slightly less than expected. The 5 year average for this early time in the season is 14%. Spring wheat is only 6% planted vs. 21% average, slowed considerably by the cool, wet weather pattern in the northern plains. Winter wheat rated 43% good to excellent vs. 42% last week. Winter wheat headed, a measure of development of the crop, was 14% vs. 12% average.

Dalian, China grain futures were sharply lower today following our big losses yesterday. South Korea bought 110,000 tonnes of US corn, according to South Korean traders.

The US Western Corn Belt will be dry today through Friday, allowing for rapid corn planting progress there. Scattered rain is forecast Saturday with dry weather returning Sunday. The Eastern Corn Belt had light rain the last 24 hours with more of the same expected today. Dry weather is predicted the second half of the week before scattered rain moves in over the weekend. The 6-10 day calls for above normal rain, which could slow corn planting further and increase the chance of acres being switched from corn to beans. The Southwest Winter Wheat Belt will stay dry the next several days with scattered rain expected over the weekend, which will be welcome. The 6-10 day calls for above normal rain with the exception of the southwest part of the belt, where below normal rain is forecast. The Northern Plains will see light, scattered rain today and up to 1/2" Thursday and Friday with more rain Sunday. The 6-10 day calls for cool temps with above normal rain in the southeastern part of the belt and below normal in the northwest part. All this moisture will keep spring wheat planting slow.-- Vic Lespinasse

Outside Markets Bearish For Grains

A lower start is likely in all pits this am although possibly not as much as overnight in beans and oil. The early call is roughly 6-10 lower in wheat and corn, 5 down in beans. Crude oil and equities are sharply lower while the $ is higher, a bearish combination for all the grains and the reason grain prices were all lower overnight.

The USDA this am announced the sale of 110,000 tonnes of US beans to China for the 2008-09 crop year, which started last Sep 1, as well as the sale of 120,000 tonnes of US beans to an unknown destination for the 2009-10 crop year, which starts this coming Sep 1. It is widely believed the unknown destination is China, of course.

The USDA also announced the sale of 40,000 tonnes of US bean oil to India for the 2008-09 crop year, which started last Oct 1. The US has now sold a total of 340,000 tonnes of 2009-10 beans to unknown destinations since Friday, all very likely headed to China. Once again, this underscores ongoing strong Chinese demand for our beans as China continues to shun Argentine beans due to concerns about their reliability due to high tension between the Argentine government and Argentine farmers.

The huge bean oil sale to India reflects sharply tightening palm oil stocks, especially in Malaysia and Indonesia, the two largest world palm oil producers, and sharply rising palm oil prices, significantly reducing the discount palm oil usually enjoys vs. bean oil.

China is also expected to be in the market for more vegetable oil and with palm oil stocks getting ever tighter, they too might buy bean oil rather than palm oil. Dalian, China corn, bean and meal prices were lower today but palm and bean oil prices were higher.

Corn planting will be reported this afternoon and traders expect about 5-7% of the crop has been put in the ground vs the usual 15-20% for this time in the season. Planting delays have resulted this season from inclement weather.

Widespread rain in China's grain growing areas over the weekend were welcome with up to 2.5" falling in parts of the Winter Wheat Belt in the North China Plain while rain in the corn and bean areas could cause some planting delays. Welcome rain fell in parts of Argentina's wheat belt over the weekend but the driest part of the belt, southwest Buenos Aires province, had the least rain, so more will be needed ahead of planting next month.

The US Northern Plains Spring Wheat Belt will be warm and dry until Friday-Saturday, when cool, wet weather is forecast. The 6-10 day also calls for wet weather, which will slow spring wheat planting further. The Southwest Winter Wheat Belt had up to 1.5" of welcome rain in the north and central parts of the belt over the weekend but the southern areas were dry. Mostly dry weather is forecast this week across the belt. The 6-10 day calls for normal rain in all areas of the belt except the southwest section, where below normal rain is forecast. The Midwest saw light weekend rain in the west, heavy weekend rain in the east, the Mississippi River the dividing line between the two regions. Dry weather is forecast in the west most of this week but more rain is forecast in the east today and tomorrow with dry weather the second half of the week. The 6-10 day calls for wet weather in the northern part of the belt, below normal rain in the southern part of the belt. --Vic Lespinasse

Grains Independent Of Mixed Signals From Outside Markets Today

A mostly better start is likely this am, led by beans. The early call is 1-2 higher wheat, 1-2 lower corn and 10 higher beans. The outside markets were not a factor in the grain market yesterday and might not influence grains much today either with equities and crude oil moderately higher but the $ index is up as well, sending mixed signals to the grains. If the $ index were lower while crude oil and equities are higher, this would be a bullish signal from these outside markets.

Traders will be keeping an eye on the 10.59 level in July beans today, the recent top for this future. The market traded over this level overnight and if it can do so again during the session today, especially if July can close over this level, that would be very bullish technically speaking, just as the close in May beans yesterday over their double top at 10.48 was very bullish.

Malaysian palm oil jumped 77 ringgit today, which might lend some support to our bean oil market. Shrinking palm oil supplies have driven palm oil prices sharply higher recently, reducing the usual premium for bean oil over palm oil. This could cause some users to switch to bean oil, which would be bullish for our bean oil export market.

Starting today, July is the most active, liquid month.

Significant rain is still predicted in China's Winter Wheat Belt over the weekend and in their corn and bean belt early next week.

The US Northern Plains Spring Wheat Belt will be mostly dry the next 7 days, which will be welcome as it will help wet fields dry out so spring planting can commence. However, the 6-10 day calls for above normal rain, which could further delay planting. The Southwest Winter Wheat Belt saw up to 1" of welcome rain in the west the last 24 hours but dry weather in the east. More rain is forecast the next 48 hours over much of the belt, up to 1".Dry weather is forecast Sun-Thur. The Midwest will see up to 3/4" in the west over the weekend, followed by dry weather Mon-Thur. The eastern half of the belt will be dry today-tomorrow with up to 1.5" of rain forecast Sun-Mon. Dry weather will follow Tue-Thur. --Vic Lespinasse

Higher Crude & Equities Supportive For Grains

A mixed but mostly slightly higher start is expected this am, up 1 in wheat and 5 in beans but down 1 in corn. Crude oil and equities are a bit higher this am while the $ index is a shade lower, a supportive background influence for all the grains.

Egypt is in the market for optional origin wheat with results due shortly before the opening, although they probably will buy cheaper non-US origin wheat. Weekly export sales were slow for wheat, 121,000 tonnes this crop year and 189,000 tonnes next crop year.

Oil sales were about as expected, 15,000 tonnes, but the rest were at the high end of trade estimates, 880,000 tonnes old crop corn sales and 150,000 tonnes new crop sales, 808,000 tonnes of beans and 167,000 tonnes of meal. The USDA just announced the sale of 232,000 tonnes of US corn to an unknown destination.

China kept buying US beans last week, accounting for 405,000 tonnes of the 808,000 tonnes sold. Strong crushing margins (the difference between the cost of the beans and the price of the products, meal and oil) in China should keep bean import demand high. Currently, crushing margins are between 200-300 Yuan, about $30-$45 a tonne. The price of meal in China has risen 18% in the last 30 days while the price of oil is up about 10% during that time, reflecting growing demand, especially for livestock feed.

Meanwhile, the Buenos Aires Grain Exchange cut their Argentine bean production estimate again (!), this time to just 37 million tonnes. This doubly bullish combination, ongoing strong demand from China, coupled with shrinking supplies from Argentina, should propel the bean complex higher today.

Beans paused in their big rally yesterday, ending a shade lower but they still seem poised to move sharply higher. May beans have already rallied a whopping $2 a bushel since the beginning of March, touching a 6 month high! If May can take out the double top at $10.48, this would be very bullish technically speaking. The equivalent level in July beans is 10.59. If beans rally sharply, the rest of the floor is likely to be pulled higher also.

Widespread rain is forecast in China's wheat, corn, and bean areas this weekend for wheat and early next week for corn and beans, all of which will be very welcome.

The US Northern Plains Spring Wheat Belt will see unwanted scattered, light rain today but mostly dry weather is predicted tomorrow through Wednesday. However, the 6-10 day calls for wet weather again, which could keep spring planting efforts slow. The Southwest Winter Wheat Belt will see welcome rain today through Saturday, up to 1.5". Dry weather is expected the first half of next week and the 6-10 day calls for below normal rain. The Midwest will see dry weather in the west until the weekend, when up to 1" of rain is forecast, followed by several days of dry weather. The eastern half of the belt will be dry until the weekend also, when up to 1.5" is forecast. The 6-10 day calls for warm temps and below normal rain, which should allow for rapid corn planting progress. -- Vic Lespinasse

Outside Influences Moderately Negative for Grains

A mostly better start is expected this am, up 3-5 in wheat and 4-5 in beans but down 1-2 in corn. The outside markets are a moderately negative influence for the grains this am with equities lower, the $ modestly higher and crude oil mixed.

There is talk China bought 2 cargoes, about 110,000 tonnes, of US beans. Malaysian palm oil reached an 8 month high today before falling back to end 26 ringgit lower. Starting Friday, July beans replace May as the most active, liquid month for trading.

Good amounts of rain are in the forecast for the North China Plain Winter Wheat Belt over the weekend, which will be welcome. China's corn and bean areas will enjoy significant rain in the southern half of the region early next week, which will also be welcome.

The US Northern Plains Spring Wheat Belt will see rain the next few days but dry weather is likely this weekend and much of next week, which will help wet fields dry out to allow spring planting. The 6-10 day calls for warm temps and below normal rain, just what is needed in this region. The Western Corn Belt will be mostly dry until the weekend, when up to 1" of rain is forecast before dry weather returns early next week. The Eastern Corn Belt had up to 1" in Ohio yesterday with mostly dry weather forecast today through Friday. Weekend rain is forecast with up to 1.5" predicted. The 6-10 day calls for below normal rain, which will be welcome as it will speed up rain-delayed corn planting. The Southwest Winter Wheat Belt will see beneficial rain tomorrow through Saturday, up to 1.5". Dry weather is forecast Sun-Tue.

Outside Influences Brew A Bearish Outlook for Grains

A mixed but mostly higher start is likely this am, steady/better wheat, steady/easier corn and 5-7 higher beans. Crude oil is mixed this am with equities lower and the $ a little higher, a slightly negative background picture for the grains.

The weekly Crop Progress Report showed winter wheat 42% in good to excellent condition vs 43% last week and 47% a year ago. Winter wheat was 9% headed vs 6% average. Kansas, the biggest winter wheat growing state, rated 37% good to excellent vs 39% last week. Spring wheat is 2% planted vs 11% average. North Dakota, the largest spring wheat state, hasn't planted any wheat yet this season vs 4% average by this time.

The USDA did report corn planting progress despite some wire service reports they wouldn't. 2% of the corn crop has been planted vs 6% average. This is the same slow planting pace as last year.

Malaysian palm oil shot up by 150 ringgit today with stocks at a 20 month low amid expectations of very strong export demand. An updated export demand report is expected tomorrow. The National Oilseeds Processors Association, reported its March crush at 137.3 million bushels, as expected. Oil stocks were 2.593 billion lbs.

Welcome rain is forecast in the North China Plain over the weekend into early next week, benefiting wheat in this region. The Corn and Bean Belt of China will be mostly dry the next 7 days but temps will be cool, reducing the need for rain at this time.

The US Northern Plains Spring Wheat Belt will be mostly dry until Thur-Fri, when up to 3/4" is forecast. Dry weather would be welcome in this region to allow fields to dry out so spring planting can speed up. The Southwest Winter Wheat Belt will be dry the next 2 days with rain forecast Thur-Fri, up to 1.5", which will be welcome. Dry weather is then predicted for several days. The Midwest will be dry in the west the next few days with rain forecast this weekend of up to 1". The eastern half of the belt had widespread rain yesterday, up to 1". Dry weather is forecast the next few days with more rain this weekend, up to 1". The 6-10 day calls for below normal rain, which should allow corn planting to speed up.--Vic Lespinasse

Today's Weekly Crop Progress Report Not Expected to Include Corn

A lower start is likely in all pits this am, roughly 5 cents down across the board. The outside markets present a mixed picture as far as the grains are concerned this am with crude oil and equities lower, which is bearish for the grains, while the $ index is higher, a bullish indicator for the grains. Malaysian palm oil jumped 66 ringgit today, touching a 7 month high in the process. Watch crude oil, the $ and the equity markets for general guidance in the grains again today.

The Weekly Crop Progress report this afternoon is not expected to include corn planting progress as the wet spring has delayed the start of early planting in the Midwest. It is still too early to plant beans in the Midwest, especially this year with its cold, wet conditions. Normally, corn planting should be around 5% done by mid-April, just a few days away. Of course, once the weather finally improves, farmers will race to plant as much corn as possible. The longer corn planting is delayed, the more farmers will be inclined to plant beans at the expense of corn.

South Korea will be in the market April 23 for 100,000 tonnes of optional origin, non-gm beans.

Continued very warm and mostly dry weather in China's main wheat, corn and bean areas is forecast at least the next several days, increasing the need for increased rain there soon.

Widespread rain was seen in the US southwest winter wheat belt over the weekend with up to 1.5" falling. Mostly dry weather is likely the next few days but up to 1.5" more rain is predicted the second half of the week in northern and eastern parts of the belt. The 6-10 day calls for below normal temps and moisture. The Midwest saw scattered, light weekend rain. More is likely later in the week in the western half of the belt. The eastern half of the region will see up to 1.5" of rain today, favoring southern and central areas. More rain is predicted in the east this weekend. The 6-10 day calls for cool temps with below normal rain in the west, above normal rain in the east. Warmer, drier weather is needed in most of the Midwest to allow soil to warm up and dry out a bit for spring planting to begin.---Vic Lespinasse

Higher Outside Markets Plus Neutral-to-Bullish USDA Figures Look to Support Grains

Crude oil and equities are higher this am while the $ index is lower, a bullish combination for all the grains. If these outside markets remain in this bullish posture they will provide support for the grains today.

The USDA report was neutral to bullish and the early call is 5 or more higher in wheat and corn, 15-20 higher in beans. The bean carryover was put at 165 million bushels, a few million below trade ideas and the lowest bean carryover in at least 5 years. Corn's estimated carryover was 1.700 billion, roughly 25 million below trade estimates while wheat had a carryover of 696 million bushels, in line with trade estimates. Oil was estimated at 2.748 billion lbs, down 30 million lbs from last month's guess while meal was 300,000 short tons, unchanged from last month.

The USDA left its estimate of the amount of corn to be used to make ethanol in the 2008-09 crop year unchanged at 3.7 billion bushels and the amount of bean oil to be used to make biodiesel fuel unchanged for 2008-09 unchanged also at 2.2 billion lbs. Bean exports were projected at a record 1.210 billion bushels.

World carryover stocks were guessed at 158.1 million tonnes for wheat vs 155.8 million last month. Corn was guessed at 143.3 million tonnes, down from March's 144.6 million. Beans were put at 45.8 vs 49.9 last month with meal stocks 5.3 vs 5.2 and oil stocks 2.7 vs 2.6. The USDA lowered its guess on Argentine bean production to just 39 million tonnes vs 43 million last month, accounting for most of the drop in estimated ending world bean stocks. All other world production estimates were left unchanged from last month. This report is not a major one but it will still have some impact on prices this am.

Weekly export sales were also out this am: 189,000 tonnes of wheat for this crop year and 184,000 tonnes for next crop year, a total of 373,000 tonnes, in line with trade estimates; 1.063 million tonnes of corn, higher than expected; 431,000 tonnes of old crop beans and 190,000 tonnes of new crop beans, a total of 621,000 tonnes, less than expected; 86,000 tonnes of old crop meal and 24,000 tonnes of new crop meal, a total of 110,000 tonnes, in line with trade ideas; and 7,000 tonnes of oil, less than the trade was expecting.

The Australian wheat belts in both eastern and western parts of the country are dry heading into autumn winter wheat planting time, a situation that bears watching. Very warm and mostly dry weather is forecast to continue in China's corn and bean belt, another situation that bears watching.

The US southwest winter wheat belt will see up to .75" scattered rain in the north today. Up to 1.5" more rain is forecast over the weekend, favoring the southern and central parts of the belt. Lighter amounts are predicted elsewhere. The 6-10 day calls for cool and wet weather, which will help build up soil moisture supplies. The Midwest will continue to see rain favor the southern half of the belt with rain in the west today and again early next week while the east sees up to 1.5" rain today and tomorrow. Up to 1.5" more eastern Midwest rain will fall early next week. The 6-10 day calls for cool and wet weather, which will keep early corn planting efforts slow. This is potentially bullish new crop corn and bearish new crop beans as corn planting delays could cause farmers to plant more beans and less corn.---Vic Lespinasse

Outside Markets Sending Mixed Signals to Grains

A mixed start is likely this am, similar to the outside markets, crude oil, the $ and equities, which are sending mixed signals to the grain market currently. The early call is 3-5 down in wheat and corn, 1-3 higher in nearby beans with deferred months a few cents lower. There isn't a lot of fresh market moving news yet this am and today many traders will concentrate on evening up or adjusting their positions ahead of the USDA Supply/Demand and World Production Reports tomorrow am. They will also watch the outside markets for guidance, as usual, especially if the outside markets move sharply in either direction.

The trade is looking for ending US wheat stocks of 697 million bushels, corn stocks of 1.724 billion bushels and bean stocks of 168 million bushels. Traders will also pay attention to the USDA Argentine bean production guess, likely to be reduced 1-2 million tonnes from its current 43 million tonne level.

No significant rain in the picture for China's corn or bean belts the next week or so with temps warming up. There is a growing need for rain in China with spring planting getting underway.

The US Midwest will see more rain in the southern half of the belt today-tomorrow and again early next week with amounts up to 1.5" expected. The 6-10 day outlook calls for cool and wet conditions, likely to keep spring fieldwork slow. This could be bullish new crop corn and bearish new crop beans as any planting delays could increase bean acreage while decreasing corn acreage. The southwest winter wheat belt expects up to .6" of light rain tomorrow in the northern and central parts of the belt, but dry weather is predicted elsewhere. Up to 1.5" of widespread, welcome rain is forecast over much of the belt this weekend. The 6-10 day calls for cool and wet weather. All this moisture will be beneficial for the developing crop, which might have suffered some freeze damage Monday or Tuesday morning.---Vic Lespinasse

Steady to mostly lower start

A steady to mostly lower start is indicated by overnight trading with the early call down 5 in wheat and 3 in corn with beans steady/mixed. Crude oil and equities are lower while the $ index is higher, a bearish combination for all the grains. Malaysian palm oil closed at a new 6 month high today. As was the case yesterday, the outside markets, energy, equities and the $, will continue to exert a strong influence over the grains so watch them again today for input on the direction of the grains.

Weekly winter wheat ratings started yesterday afternoon, putting the crop at 43% good to excellent condition vs 45% last year. Kansas, the largest hard red winter wheat producing state in the country, saw a 39% good to excellent rating. The USDA didn't estimate corn planting progress but that should start next Monday or the following Monday.

Conab, the statistical branch of the Brazilian Agriculture Ministry, put out their first estimate of the 2009 wheat crop, 5.2 million tonnes vs 6 million last year. They also raised their estimate of the 2008-09 bean crop from 57.6 in March to 58.1 today. They hiked their 2008-09 corn estimate from 50.4 million tonnes to 51.9 million. Oil World, the widely followed analytical firm, cut their Argentine bean crop guess from 42.5 million tonnes early last month to 40-41 million, continuing the trend of various other guesses in lowering the estimate of Argentina's bean crop. We are still waiting for an official guess from the Argentine government.

Syria bought 200,000 tonnes of wheat, either EU or Russian.

Little rain is predicted for China's corn, wheat or bean belts the next week or so. This isn't a problem yet but it does bear watching following the very dry winter period.

Very cold temps were seen in the southwest and midwest winter wheat belts again overnight and some damage might have been done to developing wheat in these areas. The market doesn't seem to think any damage was significant with wheat lower yesterday and again overnight. Dry weather will be seen in the southwest the next couple of days with rain forecast in the north and east Thursday and again over the weekend, when up to 1.5" is predicted with good coverage. This moisture will be very welcome, especially in the drier western part of the belt. The midwest corn and bean belt will remain cold again today with rain forecast in the west. More western rain is forecast early next week. The east will see rain Thur-Fri. Most of the corn belt rain expected this week will favor the southern part of the belt. The 6-10 day calls for below normal temps and above normal rain, a pattern that is likely to slow early planting efforts. This could lend some support to new crop corn prices but weigh on new crop beans since conventional wisdom holds that farmers will plant more beans and less corn if planting delays occur due to beans shorter growing season.---Vic Lespinasse

Lower Crude and Equities, A Bearish Background For Grains

A higher start is likely in all pits this am but probably not as much as overnight. Crude oil and equities are lower, a bearish background influence for the grains. The $ index is steady/mixed and not an influence at this time for the grains. The early call is 5-7 higher wheat, 1 better corn and 7-10 up in beans.

The USDA Monthly Supply & Demand and World Production Reports will be out Thursday am and the exchange will be closed Friday for Good Friday. The USDA will resume its weekly crop ratings report for wheat this afternoon and next Monday they will probably resume their weekly corn planting progress report.

The Buenos Aires Grain Exchange (BAGE) estimated the Argentine bean crop at 39.4 million tonnes last Friday afternoon, about 2 million tonnes below their previous estimate. There is still no Argentine Agricultural Secretariat bean estimate but they did say 12% of the crop has been harvested while the BAGE estimated 25% of the crop is in the bin.

The Nov bean/Dec corn ratio ended at 2.12 to 1 Friday as it moves closer to its "usual" ratio of about 2.25/2.50 to 1. Beans traded over $10 a bushel last night and could do so again this am, the first time this has happened since early February. No reports yet this am of any freeze damage in the Southwest or Midwest Wheat Belts from very cold temps overnight or this am.

Cool, dry conditions are forecast for China's corn and bean belt the next 7 days, increasing the need for warmer temps and rain as spring planting is about to start.

There was a lot of rain/snow over the weekend in the US Midwest along with cold temps. More is likely in the eastern half of the belt today. Widespread precipitation is forecast across the belt Thur-Fri and the 6-10 day calls for cool, wet conditions, which will keep spring planting slow. The Southwest Winter Wheat Belt saw weekend rain/snow but dry weather is forecast the next few days. Very cold temps were seen in the belt, down as far as the upper teens. More precipitation is forecast later this week and over the weekend. The precipitation is welcome but not the freezing temps, which could damage the crop. --Vic Lespinasse

Grains Moderately Bearish After Mixed Overnight Signals

A mixed start is expected this am due to mixed signals overnight and this am. The early call is 2-3 up in wheat, 1 down in corn and 5 higher beans. Crude oil and equities are modestly lower while the $ index is slightly higher, a lukewarm bearish combination for all the grains.

Open interest shot up 17,000 in corn yesterday with beans jumping 10,000, indicating new spec longs in these markets, probably mostly funds. Meal was up less than 1000 and oil climbed 3500 but wheat fell 3000 despite posting a big gain at the close yesterday.

Corn struggled yesterday with sharply increased farmer selling as prices traded over many farmers target price of $4. May corn managed to end over this level for the first time since March 1, not counting Tuesday, the day of the USDA Planting Intentions Report. Corn was on the defensive again overnight due to farmer selling in the cash market and this could weigh on this pit again today.

Little rain is forecast in China's wheat, corn and bean belts the next 7 days. This isn't a major problem yet but it does bear watching, especially coming out of a long dry winter period.

The US Corn and Bean Belt generally has the opposite problem, too much moisture. The southwest part of the Southwest Winter Wheat Belt would welcome more moisture. Rain or snow is forecast for the Midwest Corn and Bean Belt the next week or so, continuing to delay early field work. The Southwest Winter Wheat Belt will see more welcome rain/snow over the next 5-6 days although most of this precipitation will be outside of the driest area, the southwest part of the belt.

It's Friday and all the grains are showing big gains for the week. This could prompt some profit taking today, especially if crude oil, equities and the $ index continue with their modestly negative posture. I would not try to outguess the market, however, preferring to react rather than act. I would continue giving the bulls the benefit of the doubt and stick with the long side, at least for today. --Vic Lespinasse

Dollar Lower, Oil Higher, Good Export Numbers Look Bullish for Grains

They say you have to feed a bull every day, a bear only occasionally. The bulls should have a fulsome feast today: The $ index is much lower, crude oil is much higher, and the equity markets are higher. Grain prices were all strong overnight and a similar posture is likely this am with wheat and corn called 8-10 higher and beans up about 25. There is little fresh bearish news this am. Watch crude oil, the $ and the equity markets for input in the direction of the grains again today.

Weekly export sales were very good for corn at 1.251 million tonnes, much higher than expected for beans at 600,000 tonnes this crop year and 581,000 tonnes next crop year, and higher than expected for oil at62,000 tonnes. Wheat was in line with trade ideas at 283,000 tonnes this crop year and 100,000 tonnes next crop year while meal sales were also in line at 107,000 tonnes.

China accounted for just 58,000 tonnes of the old crop bean sales but most of the new crop sales of 412,000 tonnes. Malaysian palm oil hit a 6-month high today on growing demand and tightening stocks.

Argentina is on a national holiday today so the revised government bean production estimate might not be out until tomorrow or later. The Agriculture Secretary promised a corrected bean production guess within 1-2 days Tuesday after withdrawing its 37-39 million tonne production estimate, which is much lower than the trade was expecting.

The Census Bureau said bean oil used to make biodiesel fuel in February was 140 million lbs, much higher than January's 121 million but below last February's 217 million. Joe Glauber, Chief Economist of the USDA, is predicting bean exports in the 2009-10 crop year at a record 1.225 million bushels. He also said ending bean stocks for that crop year would be 311 million bushels vs just 210 million in the 2008-09 crop year.

More precipitation is forecast in the US Southwest Winter Wheat Belt the next week or longer but most of the moisture is forecast in the north while it would be much more welcome in the south. The US Midwest will remain cool and too wet the next 7 days or more, slowing early field work efforts for corn and beans.

China's corn and bean areas have just the opposite problem as they are too dry currently. It is still very early in the season but these are trends to watch in both countries. --Vic Lespinasse

Lower Crude & Equities, A Bearish Outlook For Grains

A mostly lower start is likely this am, roughly 5-7 in wheat and corn with beans steady/mixed. Crude oil and the equity markets are lower, a bearish combination for the grains. The $ is steady for now, not providing any guidance either way for the grains.

Yesterday's meeting between Argentine farmers and the government produced little progress with the market waiting for further developments before reacting.

Funds were aggressive late buyers yesterday in wheat, corn and beans, accounting for the ending surge to new highs and a very strong close in all these pits. This late fund buying pushed prices up to new highs for the day, touching off a lot of commission house buy stops, which drove these markets even higher. It is thought the late rally in wheat and corn was overdone and a reaction to the downside is likely this am, especially given the negative influence of the outside markets (crude oil and the equities).

Funds bought an estimated 14,000 beans, 8000 corn and 3000 wheat yesterday, much of it in wheat and corn on the late rally. There are a lot of new longs in the market today, making it vulnerable to a downside correction. Wheat open interest jumped 8000, corn and oil gained 9000 each, beans were up a hefty 14,000 and meal increased 5000. The bulls will try to consolidate yesterday's big gains today.

The US Midwest will remain in a wet pattern the next several days and the 6-10 day calls for above normal rain as well. While this moisture is welcome to build soil moisture ahead of spring planting, it will also slow early fieldwork, possibly delaying an early start to corn and bean planting in parts of the belt if it persists. The US Southwest Winter Wheat Belt will see welcome, light scattered rain or snow today and tomorrow, up to 1/4". More beneficial moisture is forecast Saturday, up to 1/2". The 6-10 day calls for above normal precipitation, which will also be welcome. --Vic Lespinasse